Google Ads is the most sophisticated advertising platform in the world. Advertisers have access to seemingly endless data sets, reports and performance metrics. While this data is extremely valuable, it can also be overwhelming. So how do you know which reports to focus on? Which key performance indicators (KPIs) are actually indicative of performance? What are the metrics that matter?
Every decision made when managing a PPC account should be driven by data. Let’s take a look at some metrics from two campaigns and decide which is performing better and what actions we should take next.
Campaign “A” has been underperforming for a few weeks now. Cost per click has been steadily increasing and overall traffic is down. Click through rate is down almost 12% and even search impression share has started to dip over the past month. 75% of keywords in the campaign have a quality score of 5 or lower. Here is a snapshot of some KPIs that illustrate the month over month performance decrease.
Campaign “B” on the other hand has been killing it lately. Conversions are up 18% and cost per conversion is down nearly 20%. Conversion rate is up almost 40% and the revenue numbers are even better – conversion value is up over 60% and ROAS is up over 73%. Here is a snapshot of some KPIs that illustrate the month over month performance increase.
The choice between these two campaigns is a no-brainer, right? The data is clear – Campaign “A” is trending in the wrong direction while Campaign “B” has shown tremendous improvement. At this point we should be reallocating budget from Campaign “A” to Campaign “B” and considering pausing “A” altogether, right?
But what if I told you that campaign “A” and campaign “B” were in fact the same campaign?
You see, that’s the funny thing about data – it can tell you everything and nothing at the same time. Without context, data is useless and it is the job of the PPC manager to put all the data in the proper perspective. This brings us back to our original question – what metrics should I focus on when evaluating my campaigns?
The answer to that question depends on the ultimate goal of your campaigns. Different goals require you to focus on different KPIs and you must clearly define your goals before you can start evaluating any campaign. When managing campaigns for a client, it is imperative to make sure that everyone is aligned when it comes to campaign goals.
The goal of most campaigns (and most businesses in general) is to make money. Many clients will tell you that their goal is to “drive more traffic to their website” or “generate more leads.” These so-called goals are really just a means to an end; their actual goal is to make more money. Getting on the same page as the client from the beginning will make for much easier and more effective communication throughout the relationship.
When it comes to client management, the only metrics that matter are the ones that matter to the client – and it’s your job to get the client to care about the right metrics. Let me know if this scenario sounds familiar:
You’re on a call with a client and explaining how great their campaigns are doing but they only want to talk about quality score and why their click through rate has dropped this week. This should be a great call; the client is making more money because of your efforts, yet you’re still on the defensive trying to justify a dip in search impression share.
As we learned from our example campaign earlier, metrics like CTR, Avg. CPC and Search Impression Share are not always correlated with the much more important conversion metrics. In the example campaign, the metrics that matter are conversions, cost per conversion, conversion rate, conversion value and return on ad spend.
Metrics like CTR and Search Impression Share can be very valuable when evaluating a campaign but, generally speaking, they are not as important as conversion data. The most important metrics are the ones that most closely align with your overall business objectives.
You should be as excited about your goals as this Colombian soccer announcer:
Choosing which metrics matter most to your campaigns boils down to which metrics best illustrate the campaign’s effectiveness in reaching your desired goal. If your goal is to generate more brand awareness, then impression metrics are going to matter. If your goal is to generate more leads, then conversion metrics are going to matter. This makes goal setting the determining factor when deciding what metrics to focus on.
Many clients will tell you that “conversions” are their goal and they’ll leave it at that. Conversions are great but they’re not exactly campaign goals – you need a little more information. How many conversions are we trying to get? How much are we willing to pay for a conversion? A specific number of conversions or a specific CPA target is a goal.
You should have a goal alignment conversation with your client to determine if they are more interested in maximizing volume (conversions, conversion value) or maximizing efficiency (cost per conversion, return on ad spend). Some clients will have very clear-cut business initiatives for each campaign but others will need help developing these goals.
Helping your clients set (and achieve) the correct goals is how you’ll set yourself apart from other PPC managers. The most value you can bring to a client comes from your ability and willingness to learn about their business and guide decision making at a very high level.
For example, one client might express to you that volume is very important to them. They are extremely focused on generating more revenue. Another client might be more focused on efficiency. Cost per conversion and return on ad spend is most important to them. A smart PPC manager who sees him/herself as more of a strategic business partner would have the same advice for both clients – profit should be the ultimate goal and balancing volume and efficiency will always yield more profit.
*The graph below shows how increasing cost per sale from $50 to $90 (sacrificing efficiency) actually results in maximizing profitability.
The metrics that matter depend on the goals you set. Help your clients to develop smart, actionable goals that will actually help their business and then focus on the metrics that will help you achieve those goals. Like and/or comment on this blog post for a chance to win your very own AdVenture Media “Salesmanship in Pixels” Hoodie.
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